Bogigian v. Bogigian

Brief Fact Summary. Petitioner-Appellee, Hazel Bogigian (Petitioner) received a judgment on the family home against defendant for $10,300 when Respondent-Appellant, David Bogigian (Respondent), sold the real estate. At the closing of the property, Petitioner executed several documents to effectuate the closing including a release of her judgment against the Respondent.

Synopsis of Rule of Law. For a release of a judgment to be valid it must be a bargained for exchange.

Facts. Petitioner and Respondent’s marriage was dissolved when Petitioner received a judgment in the amount of $10,300 on the family home when certain events take place including the sale of the property. At the closing, Petitioner executed several documents to effectuate the closing including a release of her judgment against the Respondent. The Respondent had no equity in the property so the sale did not provide any satisfaction of Petitioner’s judgment. Petitioner testified she signed the release to free the house of the mortgage so the sale could proceed. After the closing, Respondent paid Petitioner $5 as her share of the sale proceeds. The trial court reinstated Petitioner’s judgment.

Issue. Was Respondent’s release of the judgment a result of a bargained for exchange?

Held. No. The judgment is reinstated because her release was not supported by consideration.
Petitioner received no consideration for the release and there was no bargaining for any benefits from the release.
“The mere presence of some incident to a contract which might, under certain circumstances, be upheld as consideration for a promise, does not necessarily make it the consideration for the promise in that contract. To give it that effect it must be offered by one party and accepted by the other, as one element of the contract.”
Respondent’s claim of equitable estoppel is not proper due to the lack of bargaining for the release.

Dissent. Consideration may be found in contemporaneous aspects of the transaction. Petitioner’s judgment constituted a lien and had to be released for the sale of the house to be successful. The fact the Petitioner did not fully read the release does not relieve her from the consequences of signing it. The law should not relieve people from making bad bargains and the Petitioner avoided mortgage liability by signing the release.

Discussion. The court sees the signing of the release as an incident necessary to the sale of the house, but the bargained for exchange for the release of the judgment as never taking place. The result is a lack of consideration received by the Petitioner for the release.
The dissent sees other factors and aspects of the transaction as being part of the analysis in determining if there was consideration. The fact that the transaction may have been a bad bargain for the Petitioner should not be an issue in diminishing the effect of her execution of the release.